International Aviation Transport Association

Published Date: 02 Nov 2017

Introduction: -

1.1 Brief Overview of the Research:-

"Aviation industry is one of the most influential industries in the world and it is impossible to imagine the world without aviation" (Upham, 2003). Aviation Industry is the spinal column of the today’s Transportation System as aviation is the quickest and reliable mode of transport in the world. But Upham Paul (2003) states that "considering unlimited air travel would be an unacceptable concept". Since the previous Decades it can be seen that there’s been a dramatic increase in the number of passenger travelling by air and these numbers are expected to be very high in Future as the demand of the air travel is rising. According to ICAO (2010) airlines in the world carry around 2.3 billion passenger in a year and according to current situation these figures are expected to rise at an average rate of 4.8% per year up to 2036. Air Travel is Now considered as the most carbon concentrated activity participated by an individual (House of Commons, 2007, p.42). From the figures taken from ATAG (2010), Aviation has produced 628 million tonnes of CO2 annually. The purpose of this dissertation is to review the efforts, achievements & Goals of aviation industry in order to minimise the impacts of CO2 emission in the environment.

Rationale of Research:-

Aviation industry is a vital element of any country’s economy and attracts tourism and business much more than any other industries in the world. After considering the current demand it should be a precedence of the aviation industry to provide clean and quiet environment for the next generation and has to be sustainable.

According to Intergovernmental Panel on Climate change Aviation Industry emits 2% of Global CO2 emissions However, the overall impact of aviation is considerably greater due to "non-CO2" effects such as ozone generation at cruise altitudes from nitrogen oxides (NOx) and the formation of contrails, these concentration trails are made up of ice-crystals that formed behind the aircraft.

Increase is number of passengers is directly proportional to the increase in CO2 emission, therefore increasing the number of passengers is a huge concern. Rise in the number of short haul traveller is partially due to the success of low cost carriers – which has given rise to the phenomenon of "hypermobile" travellers (Gossling et al, 2009). This increase in the number of travellers’ results in the increase in CO2 emission produced per passenger. However the increasing demand of air travel and attraction to its Speed and reliability is affecting the results. Hooper et al (2008) states that there is no better alternative to the aviation when it comes to long distance and less carbon travel. However Considering the short haul travel these volumes are much higher and better alternatives are also available. Aviation Sector in UK accounts for 5.5 percent of total CO2 emission but this percentage is expected to rise up to 24% by 2050 (House of Commons, 2007, P.41).

Advancement in Technology and introduction of more fuel efficient aircrafts are unable to keep constant with these figures as the rise in the number of passengers is increasing rapidly. These factors have strained Airlines to show the right commitment and the right behaviour to reduce their contribution into climate change. Therefore it is very important for the Aviation Industry to consider environmental impact.

Definitions:-

As stated by Gordon, 2007 "Sustainable Development is the development that meets the needs of present without compromising the needs of future generation to meet their own needs."

The Aim of the Study:-

The purpose of this dissertation is to study and review the efforts, achievement & goals of the aviation industry in order minimise the CO2 Impact in environment and also to critically evaluate these methods to???

Industry’s Involvement:-

IATA (International Aviation transport Association)

IATA in main Body of Aviation represents 240 airlines across 118 countries and Handle 84% of global Aviation Traffic has formally launched an ambitious set of goals to approach and reduction to CO2 emission around the globe in their annual General meeting in 2009. IATA is also committed to stop an increase in CO2 emission by 2020 and half CO2 emission by 2050(IATA,

2013).

Carbon offsetting is considered as one of the mechanisms of the industry & industry is introducing new schemes and factors to show a move towards carbon neutrality. As per IATA’s Carbon offsetting scheme an estimated 90 million tonnes of CO2 will need to be offset by 2025 through the carbon markets to maintain a cap at 2020 levels costing an additional $7 billion per year to achieve (IATA, 2009). In more need of attention, IATA has set up guiding principle and toolkit for carbon offsetting (IATA, 2008) which provided a key part of the framework for this study and which will be discussed in more details in subsequent Sections. Considerably, the U.N. body represents the aviation industry, the International Civil Aviation Organization (ICAO), officially authorized carbon offsetting at its 37th Assembly in 2010 (ICAO, 2010, p.8).

Research Questions

How airlines are participating and taking the responsibility to minimises the impacts of CO2 emission.

How Airlines are motivating consumers to purchase carbon offsets by providing the relevant and easy accessible information.

What are the sources being used by Airlines in orders to aware their passengers to inform about the CO2 emission?

Aim of study

Aim of this Study is to review the literature available of CO2 emission in order to compare the issue with current facts and figures.

Objectives

To collect data from books, journals, reports and Airlines websites.

To critically analyse the literature on how responsibly aviation is considering CO2 emission theoretically.

Chapter 4

LITERATURE REVIEW

This Chapter will investigate the gap in the studies has particularly addressed carbon offsetting performance through a review of airline websites. According to Frew and winter (2008) airlines are not promoting their schemes of CO2 emission effectively also they are not acting in a responsible manner to encourage their passengers to change their travelling behaviour. However the examples and study provided by frew and winter is limited for only 4 Australian airlines, however according to ICAO (2009); in a study of 17 airlines it was very difficult to find the information about the carbon offsetting.

Gossling et al (2007) has approached the issue to analyse aviation and tourism impacts on climate change however Hooper et al (2007) furthermore looked at passenger’s behaviour towards carbon offsetting. During the research lack of dedications of airlines towards carbon offsetting provided this research an opportunity to undertake the original researches. These Literature reviews primarily focus on the challenges faced by aviation to reduce climate change impacts as well as main forces forcing industry to accept the better responsibility for its carbon footprints. It will then be helpful for airlines to address the challenges for its future.

The business case for voluntary carbon offsetting by passengers will be put forward followed by its criticisms – both technical and ethical. Lastly, carbon offsetting will be discussed in greater depth highlighting the three key themes which form the basis of this study’s research questions – corporate responsibility, consumer control and commitment.

4.2 Impacts & Responses of aviation towards climate change

According to IPCC (2007) Greenhouse gas emission is real and increasing amount of emission will increase the atmospheric temperature. From the reports published by NOAA (2010) 2010 was recorded as 1 of the 2 warmest years in the global history. According to IATA (2008) aviation is responsible for 2% of CO2 emission produced by the Globe, However on other hand Lee at al (2009) mentions that real account that includes non-CO2 effects is a 3.5% of total radioactive forcing in 2005. Increasing demand of air travel also raise a concern as air travel demand in United Kingdom is estimated to be double in 2030 as compared to 2007, which leads to increase in CO2 emission from UK aviation from 37.5metric Tonnes of CO2 to 58.4 Metric Tonnes (Department of Transport).Therefore Increasing number of passengers has directly impact on environmental impact because technological advancements are unable to keep pace with the growth of the industry.

ICAO (2009) has set a goal of 2% improvement in annual fuel efficiency up to 2050. However, the IPCC (2007b, p.49) predicts a net increase in aviation emissions of at least 3% per year as efficiency gains cannot keep pace with a 5% annual increase in global air traffic.

Here is some ambitious Goals Committed by IATA (2012) in order to approach CO2 reduction is: -

Improve the Fuel efficiency 1.5% by 2020.

Carbon Neutral Growth from 2020.

To Reduce CO2 emission 50% by 2050 as compared to 2005.

4.3 Carbon Markets and their Influence

"The Kyoto Protocol is an international agreement linked to the United Nations Framework Convention on Climate Change, which commits its Parties by setting internationally binding emission reduction targets" (UNFCCC, 2013). The Kyoto Protocol allows Annex 1 countries (developed country signatories with the notable exception of the U.S.A.) to involve in carbon trading along with the Clean Development Mechanism (CDM) and Joint Implementation (JI). CDM projects produce a kind of carbon offset called a Certified Emission Reduction (CER) which is equal to 1 tonne CO2 that is either removed from the environment or avoided by investing in agreed projects in developing countries (Annex 2). Because international aviation is not covered by the Kyoto Protocol, it means that airlines cannot surrender CERs and claim credit for their actions. However, Airlines can and do offer CERs to their passengers as a component of a voluntary carbon offsetting programme.

The voluntary marketplace exists along with the compliance market to provide carbon credits to corporations who want to improve their green credentials or individuals such as airline passengers who want to pay off for their personal carbon footprint. VERs (Verified Emission Reductions) is similar to CERs but is not governed by The CDM and therefore uses a large number of other standards. As mentioned above, CERs can also be purchased and sold in the voluntary market.

The biggest carbon trading scheme is the Europe Union’s Emission Trading Scheme, which is a cap-and-trade mechanism where emission allowances recognized as EUAs (EU Emissions Allowances) are traded. Aviation is turn out to be part of the EU ETS in 2012 when emissions will be capped at 95% based on average emissions over the period 2004-2006 with 15% of allowances auctioned from 2013. Ares (2011) expects that the mainstream of emission cuts will be met by airlines purchasing CERs rather than buying EUAs to cover any underperformance in permits or certainly reducing their own emissions.

An industry source commented that carbon offset providers are considering abandoning the voluntary sector and switching instead to supplying compliance credits to the EU ETS. This leads to concerns as to whether airlines will hoard all the CERs they can acquire to meet future obligations under the EU ETS rather

Than offer them to their passengers as voluntary carbon offsets.

4.4 A Brief Review on Carbon Offsetting

The Process of Reducing Carbon amount in environment started in 1989 as a project was established by Applied Energy services in United States with a goal to plant 50 million trees in Guatemala in return to the coal fired power station (Smith, 2007, P.14). However in 2004 Nature Air introduced the concept of carbon neutral airline by investing in the rainforest of Costa Rica (Nature Air, 2013). After 1 year British airways has joined the concept and became first airline in the world to offer Carbon offsetting to its passengers (Green Air, 2013).

The main aviation Body IATA has joined the concept in 2008 by introducing their toolkits and guidelines to reduce the CO2 emission, Over 30 airlines offer carbon offsetting service to their customers. (IATA, 2008) The figure 1.1below shows how the carbon offsetting scheme works:

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Fig 1.1; Source: IATA

4.5 Airline’s Commitment towards Carbon Offsets

As mentioned above aviation’s main bodies IATA, ICAO has shown their commitments to diminish the impact of industry in to the climate change and also have ambitious goals. Airline industry also identifies the needs of carbon offsetting and considers it as one of its mechanisms. IATA has set up its own carbon offsetting service for airlines who are taking benefit of economies of scale and the potential for greater impact through a common move towards Promotion and Advertising. There are also some airlines who do not want to partner with IATA and already have to planning to start their own carbon offsetting scheme. From a report from IATA (2009) seven airlines were due to establish their own carbon offsetting scheme and nearly 10 airlines were expected to join the IATA scheme during 2011 (Reuters, 2011). However the actual numbers were low as only 2 airlines were offering the scheme after the launch of IATA’s Scheme.

Now one of the key measure to achieve the carbon neutral growth by 2020 is to develop aircraft’s efficiency and by introducing new short routes. Lynes and Dredge (2006) states that the motivation behind investment in fleet renewal and technology is to generate the good reputation towards customers as well as it also help to strengthen the airline’s brand image. Therefore my research is focused on what do the airlines say about the carbon offsetting and how do they actually put into practice in order to get the results showing how much and serious they are committed to carbon offsetting.

4.6 Corporate Responsibility of airlines

Corporate Responsibility can be defined as the efforts made my and corporation or an organisation to balance the both social and environmental requirements of the stakeholders to formulate profitable business. Stakeholders can be different from workers to investors to governments but the main focus of this study is on consumers, or more particularly, environmental responsibility involving passengers. Currently, aviation is in the confidential state of not being bound by parameter to accept responsibility for the environmental damage caused by its carbon footprint. This is mainly due to successful lobbying of governments and problems in adopting a large-scale move that addresses genuine concerns such as fair competition.

According to IATA (2008), Carbon offsetting schemes should become a primary part of an airline’s move towards to corporate responsibility. A disciplined carbon offset scheme demonstrates a carbon cognisant and environmentally conscientious attitude of an airline. A relative study of airline websites in this study attempted to conclude if airlines’ actions match their words with regards to responsibility.

Polonsky et al (2010) illustrate carbon Offsets as the "next green marketing frontier" and advice against carbon offsetting schemes that potentially mislead consumers. Airlines also need to make it obvious to their passengers so they will know what is not enclosed by the carbon offsetting they are purchasing, such as carbon linked with its ground operations.

Airlines must act responsibly to make it clear to passengers that offsetting is a short-term solution only since offsets do not directly reduce aviation emissions on their own (Gossling et al, 2007). Airlines also need to show responsibility by encouraging passengers to change their travelling behaviour as this is probable to be even more significant than technological change.

Hooper et al (2008) carried out a survey on Manchester airport in UK and found out that more than 90% of passengers did not offset their flights and it was interesting to know that 60% of these passengers did knew that it was possible and how to actually do it. Many passengers also believed that airlines were more responsible than they actually are for addressing the impacts of climate change. These findings indicate that airlines could be and should be doing more to act as responsible corporate citizens.

4.7 Challenges and Concerns

Criticisms of carbon offsetting go down into two broad categories: - technical/scientific and ethical (Lovell et al,2009).

Additionally is perhaps the most controversial aspect of carbon offsetting since a project needs to

measure a hypothetical reality which cannot be proven. The emissions that would have occurred if

the offset project did not exist (the baseline) need to be estimated in order to calculate the quantity

of emission reductions that the project achieves. The key question that needs to be answered is

whether the project would have happened in the absence of any carbon finance. The CDM has

developed its own additionality tool which certifies projects that overcome financial, technical or

skilled-labour barriers although it is still likely that a substantial number of registered projects are

not truly additional (Kollmuss et al, 2008).

4.8 The business case for carbon offsetting

"The strength of the voluntary carbon offsets market is its ability to support a diversity of projects: including those that are small; those that bring additional sustainable development benefits; and those found in countries which are currently under-represented in compliance market projects" (House of Commons, 2007, p.27).

The global Carbon Reduction and Offset Alliance have developed their own Code of Best Practice which are strictly followed by its 10 carbon offset providers (ICROA, 2009). ICROA argues that high quality voluntary offset standards are more inventive, more cost efficient and provide precious co-benefits.

The voluntary carbon offsetting market supports a variety of projects which are not covered by compliance market. These are frequently undersized projects situated in least developed countries and with added sustainable development benefits. These projects are governed by principles established by non-governmental organization (NGO) partnerships such as the Climate Change and Biodiversity Alliance (CCBA, 2011) which concentrates on sustainable growth and conservation of biodiversity. Possibly the best known project is the Gold Standard (2011) which is supported by more than 60 NGOs and founded by WWF in 2003 supplying quality offsets under the CDM and Voluntary Carbon Standard (VCS) largely to the voluntary market. A study by MacKerron et al (2009) states that projects which have co-benefits may give confidence to uptake of carbon offsets particularly where those co-benefits are emphasized to consumers. Consumers were also found to be eager to pay the increased costs linked with such co-benefits.

Airlines would debatably have a stronger proposal on which to argue the addition of aviation in the EU ETS if they vigorously maintain support for voluntary carbon offsetting and encouraged uptake between their passengers. Officially permitted challenges to the addition of aviation in the EU ETS from 2012 throw doubt on the prediction to control carbon emissions through the compliance markets.

According to a study carried by Brouwer et al (2008); the carbon offset market could be the worth of $23 billion annually which is based on estimated 1.3 billion tonnes of CO2 emitted by the airlines passengers annually. Carbon offsetting schemes does have the potential to increase awareness to the consumers which can lead to the change in consumer’s behaviour. However, Eijgelaar (2009) points out that although there may be a willingness to offset or even change travel behaviour, this does not translate into actual offset and travel behaviour. From a report originated by ICAO (2009) the lack of alternative fuels and increasing in the capital costs aviation emission reduction is becoming Expensive as compared to the other sectors. Calculations Based on the figures mentioned above (2.3 billion passengers emitting 628 million tonnes of CO2 in 2010) and estimates a cost of $20/tonne of CO2, which results in average cost per passenger to reduce the total aviation offset would be $5.50.